For each of the following situations, discuss the competence of the evidence gathered to support the assertion being audited. Where possible, suggest a more competent procedure. Why might your suggested procedure not be performed?

a. In her audit of the cash balances of a very large wholesaler, an auditor employs a sophisticated analytical procedures program that uses activity in other accounts such as purchases and payables to predict cash activity. The auditor is the in-house expert on such programs.

b. To help determine the pension liability for a large manufacturer, the auditor reviews documentation on pension investment and payout activity provided by the senior vice president for human resources.

c. On the audit of inventory for a computer manufacturer, an auditor relies on the services of an independent inventory-taking firm for the physical count.

d. An auditor makes extensive use of confirmations to audit the balance in shortterm notes payable.

e. The sales manager of a large office supply retailer provides an auditor with an aging of accounts receivable to help audit the balance in the allowance for doubtful accounts account. The sales manager is partially paid via a bonus program based on net income.

f. An audit staff member is building a regression model to predict depreciation expense for a fast-food chain.